"What we are doing is legal," Schmidt told the Start The Week program.

"I'm rather perplexed by this debate, which has been going on in the UK for quite some time because I view taxes as not optional. I view that you should pay the taxes that are legally required."

Schmidt also added: "If the British system changes the tax laws then we will comply. If the taxes go up we will pay more, if they go down we will pay less. That is a political decision for the democracy that is the UK."

The company has been under growing scrutiny in recent weeks, after it emerged that the web giant paid just £3.4million in tax last year, despite making £3.2billion.

MPs from the public accounts committee questioned UK boss Matt Brittin on May 16 and called Google's tax arrangements "devious", "calculating" and "unethical".

Schmidt concluded: "Our position is very simple: taxes are not optional, we pay the mandatory amount."